In spite of protests by several donor countries against the three-month state of emergency imposed by Pres. Frederick Chiluba after the abortive army coup in October 1997, the National Assembly overwhelmingly voted in favour of extending it in 1998 for an additional three months beginning on February 3. On March 17, however, the president recognized the damage done to prospects of external aid by the prolongation of the state of emergency and put an end to it. On June 1 former president Kenneth Kaunda was released from house arrest, and all charges against him of concealing knowledge of the attempted coup were withdrawn. Kaunda then announced his wish to give up his 40-year leadership of the United National Independence Party when arrangements could be made for a suitable successor to be elected.

The optimistic budget introduced by Finance Minister Ronald Penza on January 30 could not conceal the extent of Zambia’s economic problems and, not least, its difficulty in achieving the level of privatization called for by potential aid donors. As an example of the latter problem, the sharp decline in the world price for copper from $2,600 per metric ton in 1997 to $1,700 in 1998 resulted in the failure to sell the Nkana and Nchanga mines; on April 2 negotiations between the government and the Kafue Consortium were called off, the consortium failing to make what the government believed to be a reasonable offer. The decline in aid also contributed to the dismissal of Penza and his replacement as minister of finance by Edith Nawakwi, formerly minister of agriculture. On November 6 Penza was murdered.

The fall in earnings from cobalt and copper continued to have an adverse effect on Zambia, but there was some relief when a meeting of donors in Paris on May 13 pledged $530 million in aid; they insisted, however, that continued support would be dependent upon economic reform and better government. Floods in parts of the country coupled with drought in others forced the government to plan to import 400,000 metric tons of corn. To help with this problem, the UN World Food Programme offered K 38 billion (U.S. $17.3 million) in emergency relief.

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